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The think tank insisted that ministers should pause before adopting a report by economist Andrew Dilnot that would spare thousands of older people from the need to sell their homes to pay care home bills.

He said the means test threshold should be raised to £100,000 from £23,000. There would also be cap on individual payments.

Pledge: David Cameron says the long-standing problem of elderly care needs to be tackled

In another intervention, the Institute of Economic Affairs, a driving force behind Margaret Thatcher’s thinking, said: ‘The financial consequences of mistaken reforms would be dire.’

Professor Philip Booth of the IEA said: ‘It would be helpful if those groups campaigning for reform were to propose practical solutions to the problems that we face that could lead to the delivery of more effective care at lower cost.’

The Government is preparing legislation on elderly care and David Cameron told the Mail yesterday that the long-standing problems had to be tackled.

He said: ‘We are committed to a white paper to ensure families and carers get real control over the care their loved ones receive.’

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Middle class pensioners should not expect help with care home bills, says think tank